Beyond 'friendly critics'

Independent directors need more accountability

- 

Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey last week called for greater accountability on the part of independent directors on corporate boards, suggesting that they should not be treated as "honorary appointees or friendly critics". This blunt message was addressed to the 2025 Annual Directors Conclave months after Sebi had debarred Gensol Engineering promoters Anmol Singh Jaggi and Puneet Singh Jaggi, who also operated the BluSmart electric-vehicle cab-hailing service, from the market. It is noteworthy that Gensol's four independent directors resigned from the board just as Sebi flagged that the promoters had been diverting funds raised for electric-vehicle projects for upscale personal expenses.

Over the past few years, questions about how seriously independent directors take their fiduciary duties have arisen repeatedly as the ambit of corporate misconduct has widened and deepened — from Satyam Computer Services to IL&FS, YES Bank, Gensol, and Paytm Payments Bank, to name prominent examples.